The goal of this project is to delineate the molecular and cellular mechanisms that drive hepatocarcinogenesis, and the immediate focus is on deciphering dual roles of molecules in liver tumorigenesis. Hepatocellular carcinoma (HCC) is one of the leading causes of cancer-related mortality worldwide, although the underlying mechanisms are poorly understood. In most recent experiments, we have found an unanticipated HCC- suppressing effect of Shp2, a tyrosine phosphatase previously known to be pro-oncogenic. Ablation of Shp2 promotes hepatic damage, inflammation, and spontaneous development of hepatocellular tumors in aged mice. Shp2 loss dramatically sensitizes the mice to chemical carcinogen-induced liver tumorigenesis. We have also found pro- and anti-oncogenic actions of Stat3 in HCC development. Consistent with our observations on Shp2 and Stat3, several other groups have identified HCC-inhibitory effects in genes previously identified as pro-tumorigenic. Although the underlying mechanisms remain to be elucidated, one common phenotype is the augmented HCC development following removal of a pro-survival molecule from hepatocytes. Of note, these mouse tumor models closely recapitulate many aspects of the pathogenic process in human HCCs, involving chronic hepatic injury-inflammation-compensatory proliferation-hepatocarcinogenesis. Therefore, we believe that common mechanisms are shared between the mouse models and human patients in HCC initiation and development. On this project, we will use the established animal models to dissect the molecular and cellular events in the liver at initial, early and late stages of hepatocarcinomas. Specifically, we propose the following 3 Aims: 1) to determine the nature of cell origin in HCC initiation and cell-cell communications driving tumor progression; 2) to determine the tumorigenic properties and aberrant signaling pathways of isolated hepatoma cells; and 3) to decipher the dual functions of Stat3 in HCC development. Success of this project will illustrate a general mechanism underlying HCC initiation and progression, and will also facilitate design of novel diagnostic and therapeutic strategies for hepatocarcinoma.